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Rio Tinto plans US$2b buyback as H2 profit dives

Thursday, February 12, 2015 - 14:54

Global miner Rio Tinto said it would return $2 billion to shareholders through a buyback despite reporting a 30 per cent slide in second-half profit on Thursday, its worst half year profit in two years.

PHOTO: BLOOMBERG

[MELBOURNE] Global miner Rio Tinto said it would return US$2 billion (S$2.7 billion) to shareholders through a buyback despite reporting a 30 per cent slide in second-half profit on Thursday, its worst half year profit in two years.

The world No 2 miner has been under pressure to please investors to ward off a fresh takeover approach from rival Glencore Plc, despite a slump in the price of its biggest earner iron ore.

Underlying earnings for the six months to Dec 31 fell to US$4.19 billion from US$5.99 billion a year earlier, based on Reuters calculations off the full-year result. This was well above analysts' forecasts of US$3.76 billion.

Rio Tinto's Australian shares have fallen 10.3 per cent over the past year against a 9.8 per cent rise in the broader market, but have outperformed rival BHP Billiton, which has been hammered by a slump in oil prices along with iron ore.